In anticipation of de-escalating tariffs and tighter technology restrictions from the Trump administration, Beijing is crafting an initial proposal to revive trade discussions with the United States, according to the report from WSJ citing people familiar with the matter.
The Ministry of Commerce of China has responded by seeking to challenge U.S. tariffs through the World Trade Organization, an institution severely hampered by U.S. actions since Trump’s first term. Simultaneously, China is urging frank dialogue, as emphasized by a statement from the Chinese Embassy in Washington, calling on the U.S. to amend its approach.
The core of China’s forthcoming proposal is the reactivation of a prior agreement from early 2020 that was sealed with the Trump administration but never implemented. This Phase One deal, which required China to increase its purchases of American products by $200 billion over two years, has been dubbed the “greatest deal” by Trump, despite skepticism from trade experts who deemed it impractical.
With Beijing having fallen short of fulfilling its commitments under the Phase One agreement, Chinese negotiators are preparing to renew discussions focusing on increasing imports from the U.S. Moreover, China is devising additional strategies to ease trade tensions. These include potential investments in U.S. industries, particularly in electric vehicle battery sectors, assurances against yuan devaluation to maintain fair trade, and reduced exports of ingredients used to produce fentanyl.
Chinese President Xi Jinping is keen to bring Trump back to the negotiating table amid China’s mounting economic challenges, even as he strengthens centralized control to prepare for a prolonged technological rivalry with the U.S. Concurrently, Beijing is establishing countermeasures to enhance its negotiating leverage.
